Why operational excellence for internal processes is important in the oil and gas industry
The oil and gas industry is a critical sector that powers billions of homes, communities, transportation systems, and businesses. But players across the various sectors of this industry battle different operational challenges, including:
Rising costs
The cost of exploration and development continues to rise, placing considerable pressure on refining margins. Since keeping production levels up while maintaining costs at the lowest level possible is the key to achieving competitiveness in the oil and gas industry, companies must seek to strike a balance between these two ends of the spectrum if they want to survive or even grow.
Complexity of operations
Operations are growing increasingly complex across the industry due to various factors such as shortage of technical capabilities, volatile market conditions, environmental issues, and so on. Resolving or navigating these intricacies is the key to a successful and productive operation. Managing the complexity of operations in the oil and gas industry requires proper planning and using advanced technology or specialized equipment to optimize operations.
Safety
Keeping employees safe is a top priority for every operator across the industry, whether on or off the field. The safety of employees in the oil and gas industry is often tied to the integrity of non-human assets. Therefore, regular maintenance and consistent monitoring is an obligation that operators must prioritize.
Sustainability issues
One topic that takes center stage when discussing the oil and gas industry is the ongoing global decarbonization efforts. As different countries and authorities are currently formulating policies, keeping up production while following sustainability policies has proven to be quite complicated. In the coming years, the oil and gas industry will see even stricter regulations relating to environmental issues. This will force many industry players to rethink their methods of extraction, production, and distribution of oil and gas products.
Despite these challenges, operators are expected to deliver change and achieve operational excellence across all aspects of their business. If properly implemented, achieving operational excellence will aid decision-making and help oil and gas businesses improve continuously in the areas highlighted above. Companies that can achieve operational efficiency ultimately surpass their competition in terms of profitability and growth in the long run.
Areas where internal operation excellence can be achieved
The goal of operational excellence is to create a business that is efficient, effective, and customer-focused. While this might mean different things for different sectors, achieving operational excellence in the oil and gas industry typically applies to the following areas:
Streamlining workflows and processes
Day-to-day operations in the oil and gas industry's upstream, midstream, and downstream sectors involve many different processes and workflows that must be well-coordinated to operate efficiently.
Achieving operational excellence in internal processes and workflows can help oil and gas companies avoid breakdowns and failures that can eventually have a trickle-down effect at the end of the supply chain.
By adopting business management solutions, companies can streamline workflows to reduce cost, increase productivity, and make it easier for employees to do their jobs. Streamlining workflows can also help to improve operational safety by reducing the risk of human error. This is particularly important for an industry like oil and gas, where even small mistakes can have catastrophic consequences.
Automating routine tasks
By automating routine and repeatable tasks like data entry, documentation, reporting, approvals, and logistics, oil and gas companies can improve process efficiency and boost productivity while saving costs. Automation also ensures that tasks are performed consistently. This is essential in the oil and gas industry, where operational and regulatory compliance is crucial. Automation makes it easier to standardize work and the resultant outcomes.
Enhancing data management
The oil and gas industry is highly data-intensive. Loads of data are generated from drilling operations, production, logistics, and supply activities. Companies can leverage this data to achieve operational excellence through effective data management practices.
Implementing a robust data management system can help companies organize and store data to make it easy to access and use. This, in turn, makes it easier for decision-makers to make beneficial decisions about operating and managing assets. Easing data management also helps with risk identification and mitigation.
Facilitating collaboration and communication
Oil and gas companies have teams spread out across different locations. They also have to collaborate with partners, suppliers, and other stakeholders that coordinate various supply chain components. Collaborating effectively and efficiently can be quite challenging for an industry with so many moving parts.
Leveraging real-time collaboration tools can help companies overcome these challenges. These tools allow teams to work together in real-time, regardless of location. They eliminate the need for traditional forms of communication, such as emails and calls, that are often prone to bottlenecks and delays. Open communication also makes it easier to monitor work and ensure accountability. These tools help define roles so performance can be easily evaluated for employees at all levels.
Adapting to changing business needs
The oil and gas industry is a very dynamic one. Things are always changing, and operators have to figure out ways to keep up. The price of oil will always fluctuate. New technologies are always emerging, and regulations that guide various industry sectors are constantly being updated. That’s not to mention changes in customer demands and pressure from competitors.
In such an ever-changing industry, oil and gas companies that are flexible and adaptable will improve their chances of success. Flexibility allows you to stay ahead of the competition, keep up with customer demands, and remain compliant with regulations guiding operations.
